From 2023-2025, PJM’s 67 million customers paid $2.2B per year for reserve capacity. From 2025-2029, they are being charged $15B per year.
Now, the companies hope to lock in ~$20B/year for 15 more years, including the earlier increase.
PJM wants to hold an auction on September 30, 2026. The FERC hasn’t approved it yet. I’m examining the FERC actions and the politics in a separate article.
Data centers nearly always have backup generators because power drops are very costly. They can switch on, or go to battery, the 0.5-3% of the time the grid is congested, dramatically reducing power demand.
A unanimous FERC, Donald Trump, and 13 State governors have demanded that grid operators adjust the auction system to today’s technology. Jumping electric prices have voters demonstrating. Most of the money goes to a handful of giant energy companies. They blame the data centers for the increased bills, but the data centers more than pay the actual cost of the electricity they use. The system, especially the capacity auctions, is rarely understood by the people and officials affected. (I’m working on another article.)
But the numbers make the proximate cause very clear: the generating companies raised their prices in PJM ten times between 2024 and bids for 2027. (Capacity auctions are three years in advance.)
Look at the price jump from 2024 to 2025. This is the proximate cause of the higher bills. It smells like collective action but I have no evidence of that.
Delivery year | RTO clearing price ($/MW-day UCAP) | Cleared UCAP (MW) | Auction value ($B) |
|---|---|---|---|
| 2021/22 | 140.00 | 163,627 | 9.3 |
| 2022/23 | 50.00 | 144,477 | 3.9 |
| 2023/24 | 34.13 | 144,871 | 2.2 |
| 2024/25 | 28.92 | 147,479 | 2.2 |
| 2025/26 | 269.92 | 135,684 | 14.7 |
| 2026/27 | 329.17 | 134,205 | 16.1 |
| 2027/28 | 333.44 | 134,478 | 16.4 |
| 2028/29 | 325.00 | 138,318 | 16.4 |
| Auction value is cleared UCAP times clearing price, summed by LDA; it is not cost to load. BGE and Dominion cleared at $466.35 and $444.26 in 2025/26. All years from 2026/27 forward cleared at the administrative cap. Source: PJM 2028/2029 BRA Report and 2026/2027 BRA Report. | |||
The data was compiled by Claude. I’ve checked it against several sources and am sending it to the companies for further verification.